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tv   On the Move With Rishaad Salamat  Bloomberg  November 9, 2014 8:00pm-10:01pm EST

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everybody.ning, i am rishaad salamat, and we are live in hong kong. this is "on the move." ♪ years in the making, now just days in the future. china's president on spending tumbling down, 25 years since the fall of the berlin wall. and in and out of china.
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the hong kong exchange and the shanghai. just about broken in the last hour. what have we got? what do we know? >> we know the starting day now is the member 17, so we are hoping, we are expecting it to the month.day in this will, of course, allow for cross-border daily purchases, and the delayed to the shanghai stock index. >> we do not know why. protests ated the some point, but we do not know what happened. we only hear that brokers have been working overtime to get this started. now, with the start of this link, we're going to see chinese investors trading in hong kong, using the system. foreigners to directly buy more mainland
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shares. key point. foreigners will have unprecedented access to china's 4.2 trillion dollar equity market, and we are seeing a lot of excitement, yes, you guess just last week, we heard from the osaka exchange, telling us thisjapan wanted in in hong kong shanghai stockinette, no specifics, just that they wanted to get in. >> we also have shenzhen. it is not just the hong kong shanghai market. a lot of buzz we have seen lately is also that market, because right now the equity age is trading near an all-time high relative to shares in shanghai. now, bank of america and templeton emerging markets fund shanghai hong kong and get started, it will follow
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within two years. we now hear that we have a launch date of november 17, so we are going to see what comes out with the equipment for this stock in that. >> right. thanks for that. and looking at the hong kong onnges themselves, reacting this news, as well, and looking at the brokerages which do trade on the hong kong exchange, getting a feel of what we can expect when things get underway, let's go over to john dawson. in a few minutes. is a tell you there two-day chart, and you can see friday, this spike up, this is actually amid speculation that the markets were actually reversing. the jump up, that was really due to the hang seng. entire asias the region.
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again, thisn to, rehearsal. they lifted the markets. nevertheless, that was down. ,he key areas, the exchanges all of the financial stocks isin, and what will happen $2.2 billion u.s., and the foreign transactions will be open again, and they will be theing the markets to foreign investors, the american and european investors, and this is enormous exposure. we will have reaction to this and also getting cpi and pbi figures out of china, and, of course, hong kong reacting in kind. i will show you the map today. this is away from the chinese open. but we do have is taiwan is opening higher.
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and then the singapore straits and malaysia. they open the hong kong shanghai and others, you may see another. greenlighted. that is a big, big step of confidence. by three is down quarters of 1%. australia is falling. gains, but has overall, a mixed picture. this.n definitely see taiwan, the opening price, medical, and the holding company there. you can see, and the korean kospi is up. also, being led higher by u.s. jobs on friday. that is the foundation. good news. for the hongdate
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kong china connect, and it is coming up, november 17. , and we cana date move forward. >> thanks. right. equity strategist. a very good morning to you. so what does this move mean for you guys there? >> well, we have always been overweight and bullish on asia. as mentioned in the last interview on september 15. i think this move has been delayed by about two weeks, and this was potentially due to the political situation in hong kong and the clarity over the capital gains tax. this will be positive. historically, the age shares have traded at a premium -- the hares have traded at a
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premium. especially over the near to medium term. >> that is interesting, jason, as we see that premium decline. what is your view on how much of this news has already been priced into the h sharemarket? abouty were trading at $19.95. this time around that we expect some difference in price, and there was a hit last friday, as well. we expected there to be a lot , goingom for the upside towards the historical average. 20%, andund 18% to three groups are starting to benefit from this announcement today.
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the first would be the shares trading at a huge premium -- i am sorry, a huge discount, and the second would be the brokers and the exchanges, definitely, and then the stocks that are not well represented. gaming stocks as well as technology stocks. >> jason, what happens then when we look at the flow of money here? who is going to be the winner? >> yes, a lot more north rather than southern. it is possible the first few days will really be dominated by a lot. probably in the beginning few days, it could be hit over the first few days, but eventually, perhaps it will be less of an issue.
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but to answer your question, probably more north and south at the beginning of the start of the connection. which, we have got only a limited amount of funds that will be allowed to be traded between the two. that is expected to widen. how much do you think it will be widened to, and when do we get free flow trade? >> at this point in time, it is hard to say, but will be see at this point in time, the markets themselves will see a lot more volume coming through, and as long as -- perhaps there could , but for now time in the short-term, we do not know. >> what about other cities getting involved? we talk about a potential of shenzhen and hong kong, a similar deal. what about other cities getting
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into the mix, as well? >> in shanghai, coming together with some of the officials and the hong kong exchange. it is clear to me that this is going to be a game changer. this is only the beginning, not the end. after the official launch of this hong kong stock connect, we could expect more collaborations. not really with the equity market. part in this, as well. expecting this collaboration to take place across asset classes. beginning,really the and then there's china and legalization. >> jason, thank you. from singapore. news, foreign affairs ministers. free trade will be sealed with in days. let's go to sydney.
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this is 10 years actually in the making. is it really going to happen? >> well, certainly the planets are aligned in terms of the right people being at the right place at the same time, and a nice signing ceremony, and prime minister tony abbott is in china for the apec summit, and then the chinese president xi jinping comes here, and he will address parliament in one weeks time. there are plenty of opportunities to get this deal theed that all of negotiation's would demand. there are some sticking points, all beastly, from australia a positive perspective, mainly dealing with agriculture, seeking a similar generous deal as to what new zealand has gotten, and they would like to see the process for chinese state owned enterprises who want to be investing streamlined, and
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also the investment cap, so still plenty to be discussed even as we head into the final straight, but as one observer to these talks put it, you cannot cook anything until the oven is hot, and when it comes to train -- trade deals, china does have form for making last-minute decisions. >> paul allen in sydney. until foreignng investors have greater access to the chinese equity market. is it something to get excited about? we are looking at that and more, after the break. ♪
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inwell, world leaders are beijing for the apec summit, not
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surprisingly, china is making the most of the attention that is being generated. chinese president xi jinping is touting the country's economic muscle, as he signed deals with countries near and far, and stephen engle is at the summit and joins us now. steve, what kind of picture can we draw today? >> well, we have blue skies. they are starting to haze over a little bit. we just had a long procession of the chinese domestic limousine maker cars that were driven by tse dung and- mao others. there are number of different days,rals over the coming including with president xi jinping. offident xi jinping kicked
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the ceo summit this weekend with a rousing speech, saying china's slowing economy should not be viewed as being scary. he said the chinese economy is getting to a more sustainable level of growth, one that is going to rely more on consumption-driven growth rather than investment and, of course, exports. he said china holds lasting and infinite promise for those who and the destinations where china invests, and he gave some pretty large statistics, as well. trillion u.s. in outbound investment will, over the next decade, and he expects to import more than $10 trillion over the next five years, all the while maintaining steadfast the reform process. let's hear from president xi jinping.
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reform has entered the deepwater zone, where tough challenges must be met, and we have to have the strength to crack the tough nuts and deal with chronic problems. >> well, with president obama arriving this morning, of course much is made of the united states pivoting cube asia and the strategic alliance with japan. regina -- china will be using the summit to push their own initiatives. they have proposed their own regional trade zone, if you will, to counter the transpacific partnership , which doesobama not include china at this moment. also, of course, china has proposed its own asian investment infrastructure bank, if you will,
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switching out for the taiwanese dollar. and again, reacting to the situation. overall the taiwanese dollar and the aussie.
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and that is what is going on at this moment. >> and it ended here in hong kong, and we are, of course, getting reaction. it will start next monday. the market opening up with 4.8%. about six minutes from now. and let's check on some other the stories making headlines around the world. 25 years since the fall of the berlin wall. this is on this stretch of the divide. and weaken gorbachev was there, and there was the former president there. some dreams of peace and freedom. and facing murder charges today,
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accused of killing two indonesian women. they said this could be procedural. looking to have it transferred to the high court. and after three years, in 2010, cracks in the northern side of a bank. one of the largest things used on earth. 20 meters. i think it was created years ago. and people plan to vote with about half of them reporting. ok, let's take a look. hong kong and shanghai markets.
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ending with a gain of 2.2%. the commencement of the hong kong shanghai connect. and this is next monday. any hang seng futures, 2.8%. watching the hong kong exchange itself. 4.8%. and for the brokerages, reaction there. also in shanghai, as well. in the open for the hong kong and shanghai markets, coming up, right after this very short rate. -- short break.
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>> and exchange of views. at the hang seng index index, heading for a rally. with a criminal investigation, and takata plunges once again. looking at raising the sales tax once again. and the shanghai stock connect,
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and it will be on november 17. and we will be digesting the news at the start of the session. >> 2.2%. and the hong kong exchanges, there is again. hong kong exchanges rising, and we do have these down. and this could be a dealbreaker. tax deals are so important.
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the exchanges. with the casino stocks, which you can see, may numbers. an obvious sector. with the shanghai connect. and also, all six of them. and this is with china. china of their.
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hong kong rising the most of any market in asia. top performers. china resources. and, of course, the hong kong exchanges. >> ok, we have got the ppi number coming in with another decline. slightly worse than expected. september saw a drop. consumer prices coming in line. this was pretty much, as i said, exactly what the economists had been thinking. we had the previous month, and we will have more on this breaking data and have more developing about the shanghai hong kong stock connection, but let's start off with the economic data. the chief asia economist is now with me. thank you very much for joining us.
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this pbi number, why don't we see that translates into the pbi level, or are re-already seeing that? -- or are we already seeing that? >> ppi is very, very concerning. >> people talk about the overhang. months of this figure being negative. it should be unwound by now. >> yes. there is a history with the pbi, in this is with the capacity. also, weak demand. and there was the global demand. a drop in the commodity price.
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>> how was it over the weekend? >> this is thanks to the export number. >> which is worrying. when you think about it, this is an economy that is slowing down. it is not really reflected in that gdp data. >> that is in two years time. 7% could be there with the future. even lower growth. but, actually, that is room for structural change, and the fiscal reform. fiscal reform and state owned enterprise reform. >> we have been talking about this. we should not hold our breath, should we? >> i think it will be a key year for china. >> ok, let's get to the other big story today, and that is the
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hong kong shanghai stock connect . is this a game changer? >> it is, and it is also for reform. think about this. foreigners can buy, and that is a very significant step. >> it will be critical if they want to have that. >> yes. a key part of it. china already at the investment side. slowing investment in china. and this will be a another one. about the capital markets. >> ok, but what are the implications overall? this is part of the whole process of making it free-floating? >> exactly.
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but also, china has done quite a lot. this is the markets. this will form the key. >> all right. that is the thing. do we get this, maybe going into derivatives? with the commodities? >> exactly. these are also going to the decimals. this is from a broad. >> what we were talking about, the hong kong shenzhen link, as well. that market has really, really outperformed everybody.
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>> this is part of it. this will be the next. >> thank you very much. and we are going to get more on this, because it is not just the hong kong shanghai, but we will also have the data. further declines. will we see? >> 1.6%. this is exactly the same as after the figures came out.
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and i will get rid of that and this is 2.2%. this is in line with estimates, as well. this is the sort of story. this is reacting to the hong kong shanghai connect event. a crucial technical level. what we have not done is the tax details. what it means. who is going to pay the tax. and the investments again. that was still forthcoming. the tax could be a dealbreaker. you never really know the details. how complicated it is, and there are all of these factors. it is a good starting point.
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and there are hurdles, with that in the middle. the 24,000 level there. one point 1%. >> thank you. and we will be talking about taxes, and we have the sales taxes that are going to be raised again next year. we have a new bloomberg survey inning as new direction, and let's go over to tokyo. the economists and market economists, raising it, as planned, to 10% next october. event that will affect that decision when it is taken? >> the government has basically said they looked at the third quarter gdp data, which will come out next monday, and based on that data, they will make their decision by the end of the year. so we should have a reasonable idea about how they did last
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quarter, and they will say this growth is strong enough, or this growth is not strong enough. they are expecting it to be about 2.8%. it is growth, but it is not very strong growth. compared to the second quarter, it does not go anywhere to get to the contraction that happened then. so it is quite weak growth, and the expectations for growth have been falling basically since august. every time we do a survey, the expectations are different. it is not a very confident number. they will decide that. it is not clear how strong it will be for them to raise it. >> james, to they have any direction on this from the government ministers? >> mr. aso said they should
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raise the sales tax. they will have to raise the tax. being much more cagey. and it would have to be made quickly, and they will not postpone it. he will decide when the time comes. there was a story out over the weekend that abe may choose to postpone and go to an election. that just seems to be in the government policy, to see how much simpler that would get. the feeling within the government, the ruling party, from the from the coalition, it is that the tax should be raised as planned, so the majority of senior figures in the government seem to agree that the tax
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should be raised, even if that is going to push japan into another contraction next year. >> james, joining us there about the sales tax increase next october there, as well. ok, a preview of what is coming up next. that is the spirit. going into the christmas season. this is "on the move ♪
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>> here is shery. >> high-speed rail is heading for mexico. it was later than planned. when bidding is set to reopen this month, there was a consortium led by china railway construction. they are fighting concerns that china rail will be bidding
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again. meanwhile, expanding a recall of vehicles in the most humid region due to faulty airbags, and owners are being notified, and the cars will be repaired free of charge. at least 53,000 cars may be effected, which had airbags from takata, and it was involving matters shot -- metal shards being fired into the cabin. and authorities are investigating a failure impacting backing the 2013 accord. more than 300,000 cars could be involved. there was a string of complaints , and those were the top corporate headlines. >> taking up residence in paris. the chief executive. festive season, and a growing presence in the digital
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world. >> christmas is bigger than just december 25. it is really the buildup to christmas. it is about celebrating. we have created it. this is like a little superstar. aut, again, we have designed different pieces of content across all of the different platforms, and then it goes in the store and online. great and/orsee a advertising, with the windows. first british brand taking on the fashion capital of
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the world. >> london being the fashion capital of the world. wonderful is the creativity. we worked on both windows. the puppet making was incredibly beautiful. >> some rivalry with the french? >> no rivalry. it is a treat to be an paris. it is such a magnificent city. we love it. >> at the forefront of this experience and the campaign. canhis is about how we combine the physical experience so weomething online,
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have worked with the incredible team at twitter to have the and itity of being able is not just the commercial vehicle. and why should we not be onand n different it is not just the commercial vehicle. and why should we not be on different social platforms? >> the european customers, or because the way of the future is all on digital? and -- >> it is really about storytelling and engaging, and digital allows you to do that. and you canime, share your experiences and create your experiences.
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a creative drama and organization. place to place. >> all right. plans to raise $1 billion. that is coming up when "on the move" ♪ returns. ♪
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>> right, let's just check in. this is the nikkei 225 going lower. stronger -- antonyy stronger yen, kay 225 changed by about 6/10 of 1%. the sydney market is down. let'sout to singapore, have a look at what is going on there. straits times industry looking
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like a particularly dismal day there. some of this positivity is coming through due to the shanghai hong kong stockinette. that is going to start ring's off on november 17. and getting a boost in hong kong. giving up some of the gains. 400 17 points. shanghai also, just below that psychologically important 24,000 level. ok, let's just turn and have a look at the news that will be dominating the agenda over the course of the next five trading days. on tuesday, a court handing down a verdict on the 16 crewmembers of the ferry that sank in april, killing more than 300 people. prosecutors's demanding the death penalty for the captain, and that is for abandoning the vessel while students were still aboard, and a big day for online
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sales, for alibaba on meaning billions in transaction volume. last year, the company turned over or than twice the volume. all of the black friday and and thenday sales, t companysian interne behind alibaba pushing to expand its mobile applications. and moving on from china to myanmar, other leaders are spending two days there at the -- aseanmit that summit. and a luxury car story. uber is looking to expand and raise money to do so. what are people actually saying? >> they want to expand.
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they are already operating in 200 20 cities worldwide, and they want to expand more internationally, so they are trying to raise $1 billion, and now they are talking to new and existing investors about how to raise capital, but one of the people familiar with the situation says it is still too early to talk about the evaluation, but the ceo is seeking a higher valuation than the $17 billion that they got in their fundraising back in june from investors led by fidelity. now, with that financing boom in silicon valley, uber is already among the highest valued companies in the u.s., and now they are looking for expansion. not everybody is actually happy with them, especially cap drivers. they are facing increasing competition in their industry,
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so that is not good for them. many parts of the world. >> protests. london. >> right. and nowe at some point, i hear they are cooperating with cabdrivers. >> with the latest on their plans to raise $1 billion. now, the space adventure, and theellar" unofficial start to the holiday season. "big hero 6" extended the disney success by bringing marvel comics to the big screen. and the matthew mcconaughey movie got $50 million in ticket sales. that is what we have right now. and let's have a look at these markets. going great guns.
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and this will be next monday. more on that. and, indeed,ws reaction when we are back in a couple of minutes. ♪
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>> hello, everybody. it's this is "on the move." soaring intocks shori hong kong as they nailed down the shanghai tie up next week. and closing up to the rest of the world, china makes a money pit. becoming for money in china finally company next week with the tie up of the two big
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exchanges. we are talking hong kong and shanghai. the story has been developing since about an hour ago. have a date, november 17, next monday. were expecting it to be in october. -- we were expecting it to be in october. the has been causing a lot of volatility in hong kong markets. this will allow chinese investors to trade in hong kong stocks and foreign investors to directly by mainland shares. that is the key because foreigners will have unprecedented access to the $4 trillion chinese equity market. there has been a lot of excitement about this. we just heard last week from the ceo of autocracy exchange -- otaka exchange that japan wants in on the linkup and they are saying that it changes the markets.
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theerhaps this is one of many baby steps, if you well, on the way to the liberalization. let's take a look at shenzhen, because you are talking to me about this an hour ago. this is creating buzz. praxis is a market that people are excited about. -- >> this is a market that people are excited about. their equities are having a large gains. take of america, and the templeton emerging markets group are saying that we may be seeing within twoequivalent years. many analysts are excited about the market. >> take you for that. -- thank you for that. there is a market reaction. >> look at the hong kong market, up by 1.5% today. the kong is without a doubt
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strongest indexed in southeast asia. stocks are up 4% because mainlanders can go to the casinos to bet money but what they cannot do is invest in them. hong kong exchanges, that is the key there, 4% gains. we see companies rising. we have the reaction to the have therst of all, we index below 24,000. it was above the earlier on. china, for example. 2.44. you can see it rebounding at the moment. the hong kong exchanges, as you can see, up by 4%. examples purely driven
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by the announcement. i keep saying this, it is what are the tax implications? big of the taxes, how big are they, and how long do they get taxed? on transactions, can you go under the radar or will it before and investors as opposed to the local ones? casino stocks, mainland china has 19% of the clientele of these companies. mgm china, ligety stocks. -- look at these stocks. , all of it seen gains because they can benefit the most from the connect. that is all from the financials. >> world leaders are in beijing for the apec summit and
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china is making the most of the attention being generated. president xi jinping has been talking up his country's economic muscle. he has been signing trade agreements. steve joins us with a picture of what we are looking at today. i have covered a number of these different events and apec over the next couple of decades, i have covered many of them. this is an interesting one because it is being held in china, the rising china. and it is all about china right now. i feel sorry for the southeast asian nations or the latin american countries here because they may be drowned out a little bit. xi jinping,isten to he says that there is opportunity with china's rise for all the members of the apec half which makes up almost
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of global trade and the three largest economies in the world, the united states, china, and japan. xi jinping talking at the ceo summit, the beginning of the festivities. he says that china's rise should not be worrisome to the world. greatt it is a opportunity for the world and holds lasting and infinite promise. those are his words and he says that a flowing chinese economy should not be viewed -- slowing a chinese economy should not be viewed as scary. there is room for growth left. even 7% is considered a strong chinese economy. figureillion is the president xi give us for outbound investment target for the next decade. even more impressive is imports. over the next five years, china will import, as they moved way consumption driven economy, some $10 trillion worth of goods over
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the next half decade. they have a reform agenda as well. here is what xi jinping had to say. the asia-pacific has daunting tasks of raising the quality and efficiency of the economy and replacing old growth areas with new ones. there are different directions and priorities in accelerating the regional economic integration process, making it difficult to make a choice. that report is coming in from our china correspondent, steve. let's go to some of the other stories. high-speed rail is heading for mexico with bidding said to reopen this month. the project had been awarded to a consortium led by china railway, the mexico canceled it. -- but mexico canceled it. china railway will be allowed to bid again.
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is engaging in fundraising to expand. there talking to new and existing investors to raise about $1 billion. in june, they raised more than that, valuing it at $70 billion. -- $17 billion. at the unofficial start of the holiday season, "big hero 6" extended disney's success at bringing marvel comics to the bigs green, taking in around $60 million. " took second place, $50 million in ticket sales there. next, awash in oil but will opec cut production? we will discuss the and more after the break. ♪
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we are coming to live from
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our central studios in hong kong, streaming on bloomberg.com as well as your mobile device. this is "on the move." the bear market for crude oil deepened last week as they fell to a three-year low. this is due to an increase supply in the energy market. we are seeing a rebound but let's see what is going on. i am joining by a respected authority on the energy market, gary ross. singapore. thank you for joining us, gary. main talk about the drivers of what we have been seeing in recent weeks with the oil price going down. is it a case of demand or excess supply? >> it is a combination.
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clearly supply is growing tremendously, over 2 million barrels a day this year. but demand has been poor, 600,000 barrels a day. you can see from those numbers that the imbalance is about a million and half barrels a day. too much supply relative to demand, a major imbalance. >> absolutely. what can be done about it? people are talking about shale oil, the big new player in the market. this is making it uneconomical. what do you make of that? shelll, i think that is the key and we need to see lower prices to slowdown u.s. growth. they have to lay down some rigs to correct this imbalance. veryhat is why opec could well try to do something on the november 27 meeting. and they get is probably not going to be enough because there
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is just too bad much supply relative to demand even for 2015. it looks like we will be in a weak environment for some time. me, with saudies arabia being the swing producer, but even they cannot make much of a difference. but even if they do cut, doesn't that racy incentive to cheat? -- raise the incentive to cheat? >> that is a good point rid this is 1979 for saudi arabia all over again. they were 10 million barrels a day and they looks to support and they sawear volume declined to 3 million barrels a day by 1985. they learned that lesson. they're not very far from 10 million barrels a day today and they are not looking to support and see the volumes collapse. the effects of the matter are facts of have to --
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the matter are that they have to allow the praise to come down to move towards restoring a balance between supply and demand. clearly it is the u.s. where, in 2014, 1.6 billion barrels are being produced -- 1.6 million barrels are being produced. lower prices are going to affect the u.s. but that has to be the answer, it has to be lower prices. have been there and done the experience of trying to support the price and it will not work. >> is the line of least resistance for the oil price the downside, and how long and how load we go? -- low do we go? >> you have the iranian meeting with the p5 plus one countries and there may be ideal. we have raise the probability towards 60% but there will be ideal announced at that meeting -- that there will be a deal announced at that meeting. and then opec will meet. with opec there is a question of
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how much of an imbalance table want. if they continue at the september -- imbalance that they want. if they continue, the imbalance will be tremendous. there has to be some cut at the november 27 meeting to reduce the imbalance for 2015. from saudi arabia up austria stress perspective, while they are worried about market share and concerned about keeping the price too high, they also care about opec. i think that opec is important to them and they will be prepared to do something. the question is, first, you have iran and the new have opec. whatever opec does -- and then you have opec. does, we will be left with an imbalance. have to believe that when we come around 90 days from now prices will be considerably lower than they are today. is that saudihing arabia cares about opec but they
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also care about the budget situation and keeping the population happy, and that is something the other opec members are concerned about. what do they do? >> well, that is a very good question. [laughter] saudi arabia is sitting there with a hundred million dollars in the bank. bankth $800 million in the . i would not worry about saudi arabia, they are breaking the bank. they are in great shape and they withive with lower prices no impact on their economy. because they can continue to spend. the other countries will have a much harder time. iraq is already running a huge deficit and will be in financial straits. that is why there is pressure on them to do a deal with the kurds which could lead to more volume, by the way. the other countries, iran and nigeria, they will be hurting, but the reality is that a lower price will be to a
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stronger market leader. it is sacrifice now with the idea that things will move directionally in their favor. over a few years time. weak. has been that the believe growth is real, we believe that there is pent-up demand. it is not real in terms of how much potential demand there could be if prices were lower. i think that will encourage economic growth also. every $10 decline leads to a .1 or .15 increase in global gdp. it will be doing kamal demand at the margin. lead to incremental demand at the margin. >> but that is just the thing here. we have a few conspiracy theories going around. i want to get your view on one of them, which revolves again around saudi arabia. that is sager literate -- that
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this is a deliberate action by them to shut down the shale industry in the u.s.. what you make of that? strictlyot think it is linked to that end or what i say that it is linked to other objectives they have like market share in asia where they have lost market share. or not helping non-allies. things of that sort. i think that they are just doing -- saudi arabia, i have into the kingdom many times and i know the people there who are involved in oil policy. they care about oil supply and demand and price. youhe market is telling that the fundamentals are such that you need a lower price they will go for a lower price. in the long term they will have robust demand. the blue side of the fact -- of the factsight that the demand, they think you will see it forever.
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we do not believe that. emerging markets are at the point where their consumption is $7,000 per capita and that is where i can see take off. $7 70 million people a year are moving. in the immediate things are going to turn around but for now they are facing an imbalance in the need to slow down supply too rigid -- and they need to slow down the supply and rejuvenate demand. that is the priority, understanding the market and balances and adjusting prices and a way that makes sense for the longer-term robustness. >> derry, very quickly, how does this affect your business? does it make you more busy? >> history of our business is that we do well during up cycles and down cycles. so we just keep doing comprehensive analysis and looking to continue to grow our business with the financial community particularly.
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we are the industry experts. we are retained by some a 500 companies and governments for expertise. we work with the energy industry, oil and gas co,al, emissions. we bring a holistic approach because we look at all of these markets to help us understand what is happening in each of these individual markets. we are looking to grow our business and we think this is a great environment for us because people are hungry for knowledge. and we are there to provide them insight. >> gary, thanks a lot for that. breaking news this morning, the hong kong-shanghai connect, the exchange. there is a readiness test on november the 15th, two before things get going good and proper. china on the stock and a cousin
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solution according to the hong kong services sector. solution according to the hong kong services sector. a short time ago, the hong kong chief executive is expressing his sincere thanks to the estate leaders and the central government for trusting and supporting hong kong. the chief executive is saying that the financial market could make a greater contribution to the reform and the opening of the country as well as the stability and price are ready of hong kong itself -- and prosperity of hong kong itself. the fall of the wall, a look at the celebrations in berlin. ♪
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ok, let's look at this annoys me that will. thousands of people -- let's look at the headlines around the world. thousands of people marking the fall of the berlin wall. 2000 balloons were released. th angelakel d mikael gorbachevc o were there. that is accused of failing to his apartment but has yet to
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enter a plea. --executive the procedural the argument is expected to be procedural. these sphinxes reopened after repairs the sphinx is reopened after repairs. it is one of the largest stone .tatues in the world egypt all just believe it was -- a study showed that the majority of cattle on alan people plan to vote for independence.
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independence could trigger major change in the world of football. this club is taking a stand on independence. >> the the cam. when it comes to a spanish football this place is a fortress. famous for its players and its philosophy built on supplying football, the club is weighing in on the political game in the region. the a four it european champions are backing the big tube vote on a breakaway, risking the lucrative sporting empire in the process. their success is largely built from playing in the spanish league, and the intense rivalry with madrid. a break a leg -- if a breakaway led to an exclusion from the league, they could risk a large chunk of the $680 million of annual sales they make. much of that comes from the club' s deals with sponsors,
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helping more than triple revenue since 2004. ans 7.4 million catal makeup spain's largest economic region. while that may provide a degree of safety for the people, it might also for the best club. they should not find it too hard to organize fixtures. >> barcelona taking a stand on catalan independence. quite signed it, sealed, and delivered, but they are moving closer to a trade tie up. will moved to sydney in a couple of minutes. -- we will move to sydney in a couple of minutes. ♪
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brokerage stocks shoring in hong kong as our -- soaring in hong kong as our stocks in the city exchange. they stand to benefit would be connect opens. a new bloomberg survey shows the band raising the sales tax once again. the shanghai hong kong exchange link has finally been cleared to go ahead, november 17. yet another chinese city is also flashing on the radar as a strong contender.
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we will explain why shenzhen may be getting in the mix. >> they are half made up of half carat -- health care stocks in tech stocks. >> so that is the future russian mark >> that is the investment to be made or it will get the charts this year. the shenzhen composite is the second best performing in asia this year so far. the only one better is india. up by 20%. an all-time high. better than doubled the shanghai composite. 14%. if we chart it, you can see that the shenzhen composite has risen in the last few months as the shanghai has been volatile as always. shenzhen is in a steady movement upwards and there it is you can see the last two months. together,pare the two one is dramatically higher.
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orange is clearly shenzhen and the white one is shanghai. >> let's talk about the tie up. you have foreign money, $320 billion coming in. yean.illion -- yuan. in shenzhen, the companies are smaller. >> we have been waiting for this for a while. we are absolutely on a flyer on the brokerages and if you look at the hong kong exchange. >> i will show you the impact so far. go to my wonderful chart and you can see there it is. below.g seng is citigroup would on a notice --
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put out a notice on a program. there are derivatives that will connect between the shenzhen exchange and also the hong kong exchange. onigroup reiterated the by the hong kong exchanges which you can see is the stock right there, rallying. he says that the shares will climb. after this, 16 buys and seven holds. citigroup reiterating their take. that is the hong kong stock, the best performers hong kong. hang seng, there it is, up 3.4%. there is the global map. hong kong, i will trick it around if you can, and there it is. number two when the charts, up by 4%, followed by galaxy. galaxy is up because casino stocks are seeing gains.
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if you look at this, this is aboute mainlanders make 92% if not more of those that go to macau and bet on whatever it is. mgm china, for example. macau galaxy. these are the ones to go to. but they cannot invest in them until next monday. that is crucial. the tax situation must be cleared up as well but overall a good day. have a date, november 17, next wednesday -- monday, even. the connect is up and running. >> world leaders are meeting for apec in beijing while indonesia tries to firm up ties with china. how are they planning to do this? and a very good morning. >> indonesia and china have agreed to enhance cooperation -- twothe to doubt
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countries particularly on maritime infrastructure. indonesia wants to be a global maritime power while china institutes a modern program. this conforms to each other to a high extent. but sticking listen to this. -- let's take a listen to this. is building a maritime silk road for the 21st century. this will be good if we can work on it together, something double benefit china and indonesia. both countries gain from the project and that is what we are working towards. calls for the chinese to be more involved in the construction of ports, railways, and toll roads and indonesia. other than that -- in indonesia. other than that, they are talking about cooperation in security and law enforcement including anticorruption and antiterrorism and exchange among cultures and people including the plan to form a cultural center between both countries.
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also demanding a bigger role in the infrastructure investment buying, killing the bank to open funds to flow into indonesia. china will have a 50% stake. indonesia will have a smaller stake in the bank. paid in installments over the next five years. >> thanks for that. we have more headlines coming third just a short while ago with china and south korea set to sign a free-trade agreement. this is after a summit takes place between the presidents according to spokesman there. -- spokesman there. the agreement would exclude race. --rice. china also making news again. australia' us trade and foreign affairs minister say that they
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are getting a free-trade deal signed, sealed, and delivered within days. let's go over to sydney and talk to paul allen. this has been 10 years in the making. how close are we? >> pretty close. and certainly the planets are aligned in terms of having a some sorts of ceremony which usually accompanies the signing of free trade deals. we have the australian prime minister tony abbott in beijing for the apec summit and china's president xi jinping comes here for the g-20 summit and will stick around afterwards to address parliament. there are plenty of opportunities to attend to the ceremony involved in these kinds of things. we are certainly getting very, very close after almost 10 years of negotiations. as usual, the toughest things always get negotiated last. so there is always a chance that this could be delayed. >> what are the potential sticking points with all of this? china --in the case of
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or in the case of australia, it is agriculture. australia is seeking better access to agricultural products and something similar to the generous free-trade deal that new zealand got from china as well. a couple of weeks ago we had coal on the table when china decided it would reimpose tariffs. they came into force last week and china has tall story the best way to get those removed is through an fta. from china's perspective they want a streamlined process for state-owned companies to invest in australia. on a personal level they want to extend to the private investment exemption of $201 billion. there is cause for confidence -- of $1 billion. there is cause for confidence, china certainly has history with last-minute concessions when trade negotiations are involved in my favorite quote surrounding
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this, one observer that is close to the negotiation is saying that you cannot cook anything until the oven is hot. >> paul allen in sydney. we will turn to some of the other stories we are following this morning, a busy day when it comes to the corporate side of things. here is you yvonne. airline's cabin crew are rejecting offer that would've made in the best aid in the industry. this comes less than a year after america' s merger. the recallxpanding into humid regions. the concern is faulty in bags or it owners are notified and the cars will be repaired free of charge. at least 53,000 cars may be affected by the issue which ,nvolves airbags from takata which can fire metal shards into the cabin. one of honda's best-selling cars
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is under investigation in the united states. they're checking a power -- steering failure in the accord. this was launched after a string of complaints from owners. those of the top corporate headlines this hour. .'m yvonne man >> no one knows if japan's a sales taxes will be raised again next year but we have a survey giving us a bit of direction. james is there. what we know and what are we hearing? >> good morning. the survey that we did last week of a number of market economists, 12 of the 15 we surveyed said that the tax is going to be raised as scheduled from october next year. there was one raised in april raise in april this year and in april this year and then the government plans to raise it to 10%.
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the feeling of the market is that even though that raise in april push the economy into the biggest contraction in five years, the government is going to go ahead with the second raise. one of the people we spoke to said that there is no option but to raise the sales tax japan has so much debt -- tax. japan has so much debt and with an aging population and higher social security bills they have to raise revenue to pay these things and pay down the debt. the increasing sales tax is unavoidable. then every got direction from the government itself? -- have we got direction from the government itself? any ministers mentioning the tax? >> the finance minister is very much behind this proposal to raise it again. he said that it definitely should be raised as planned. he is saying that the decision is up to the prime minister
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abe and he will make the decision after next monday' rest third-quarter gdp. monday's third-quarter gdp. the afternoon with the revenue is for next year to create the budget so we should see some indication next week as to whether the government has decided to raise the tax or not. as i said, gdp comes down monday. there is a series of meetings through the end of next week on a first on the sales tax and once that information is in the government and the prime minister will make a decision. one indication whether it will go ahead or not. >> james, think you for joining us. on the possible sales tax hike in october of next year. possible but not definite. up next, when size matters, biggest is not always better. the battle over who is the thinnest tablet. that is when "on the move" returns.
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>> we're back with "on the move ." easilyrs are breathing with news that the drop in sales as if the bottom. dell is turning up the heat on the tablet industry, announcing a new series and claiming to have the thinnest tablet around as well. james joins us from singapore. talk to us about these two tablets that you haven't the moment. it is a crowd -- you have at the moment. it is a crowded place you are getting involved in, will make you, you can sell these two? >> first, thank you for having me. the tablet is a competitive marketplace, however we are adapting to different usage models, different customers need
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different things out of their tablets. so we are building a range of tablets to tackle different usage needs so that customers can be mobile, productive, and just as importantly, secure and manageable given the nature of being mobile. >> absolutely. let's just bring this up, we had the love it. one of these is the thinnest one around, you claim. thinnerr better -- better? >> increasingly in i.t., especially with the consumerization, customers are requiring a not just secure and manageable pcs but what they also want are things that are visually appealing and hence we have taken that onboard and continue to improve the industrial design of the products we sell across the desktop and mobile and into the tablet space.
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not have video of it, but you brought those tablets in with you. let's look at the thinnest one. >> this is the thinnest. this is the venue 7000 series. it is very thin at six millimeters. we also have our new venue 11 pro machine which is what a windows-based machine. those are what we announced at dell world. we continue to innovate to meet the needs of customers around the world. as computing power become smaller and smaller what we are seeing is an increase in the proliferation of designs that allow people to create new usage models are optimize their existing usage models. -- or optimize their existing usage models red >> how do you take on apple and the ipad question mark it is the market leader -- ipad?
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it is the market leader. what do you offer on top of what they would be providing? >> the focus of our tablets from the venue series is to be the thinnest, to include new technologies that will make the difference in terms of how people are able to use them. from the venue pro space it is about providing familiarity with existing desktop operating systems and mobile operating systems and giving the best of both worlds. again, it is not about necessarily competing with certain tablets. it is about meeting the needs of our customers and making sure we provide them with a solution to their business to be productive and mobile. >> let's talk about the pc business as well. after languishing for a few years, it is seeing a rebound take lace. ?- place .
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do you expect that to continue? are you seeing that it down? /-- at dell? >> we are seeing robust growth and i expect you see that continuing to seven quarters. in some places there are strong growth, depending on the country. even in countries in which there is a lack of growth it is still not impossible to get market share. it is about growing market and getting organic growth. are flat orhat contracting there is still the opportunity of inorganic growth whereby we continue to acquire .ustomers from the competition we continue to stay the course. the client businesses export nearly important for us. even as an end to end solutions provider, from the data center to the endpoint, the endpoint is driven by client pcs . s. to doing on what you want
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in terms of content creation, the client becomes necessary. we are seeing is a proliferation of formal factors that allows people to get jobs done more effectively and quickly. terms of a company strategy around to cloudy, big data, mobility, and security, i believe that our focus is making sure that as we deliver mobile solutions we deliver the appropriate security around it. we are one of the few companies pcs withship security on them that allows for authentication and encryption as well as malware prevention. we are well-positioned and will continue to invest in client businesses. one of the benefits of being a private company is we are able make decisions that would be more difficult in a public we traded environment. for example, we have increased r&d spend from 1.6% up to 2.1%. we continue to look for ways that we can better serve our customers and make use of our infrastructure to enable that.
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i think of the pc has a lot of life left in it now and into the future. that.es, thanks a lot for james johnson joining us from singapore from dell. we'll take a break, but coming .p next get on board or get out of the way. modi is in no mood to slow down. heading to mumbai with his efforts to reinvigorate the indian economy. wo.t is coming up in t ♪
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we are going down to the trading day in india. ssion is 52se away. they were unchanged on friday with the singapore's futures contract. we will see an uplift taking
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place today over in mumbai. it does come against the backdrop of india's prime minister expanding his cabinet. modi pledged to consolidate the ministries when he takes office but he has appointed new members. --t if we got going on here have we got going on here? government is adding ministers across the spectrum, expanding the number of ministers to 66. why is the expansion important? government came into power with a promise of minimum government and he has changed that. moving portfolios. he has ensured that his government is best prepared to to help theeforms economy clock its way out of one of the worst economic slumps india has seen in 25 years --
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aw its way out of one of the worst economic slump into has seen in 25 years. experts are saying that although the economy is in better shape we have yet to see any real or actual investments on the ground. pressure is building for restructuring, trying to move up the constraints of growth and issue prices. inflation is falling but it looks like interest rates will definitely go down. speaking of those changes, the furnace minister yesterday was saying that india will soon ease land purchase rules, initiate tax reforms, in order to bring down the government stake in state-owned banks to 52%. those are some of the measures he is outlining. mumbai with the latest on the plans for the economy. we can get more on that by going is or shoulde, it
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beat your online source for business and market news each day. bloomberg.com, do check it out. if you use twitter it is easier to stay in touch with us. @bloombergtv. you can follow me on twitter as well. let's have a quick look at markets which are trading at the moment in this part of the world , taking a look at the hong kong industries. all of the news of the hong kong-shanghai connect, long-awaited. that wasis the day announced -- next monday is the day it was announced for it to start, november 17. over the lunch break in japan, the k 225 finishing with a .7% decline. the yen is affecting things along with uncertainty as to the sales tax hike.
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are inia and new zealand opposite directions, the wellington market up by 1% but sydney declining .7%. that is it for this monday edition of "on the move." stay tuned for "asia edge" coming up next. ♪ .
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>> this is victoria harbor in hong kong. it's in the middle of the asian trading day and you are watching "asia edge." ♪ >> the day has finally been set and the close of markets are opening up like never before -- before. the shanghai opening. andg the winners is casinos chinese investors will get their first chance to buy in. next, heading to
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beijing and the apec summit. china offers an investor to counter the u.s. optimism. increases speculation that china will finalize a long-running agreement and of coming days. the burning issue in spain. why independence would mean for one of the world's biggest football clubs, all of that and more on "asia edge." >> back to our rubric story. -- top story. bloomberg news emerging markets what is going on? we have been waiting and it is over with or is it? >> it has finally been announced. like all investors, we have been waiting to see if it will close out. the chief

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